Sitcoms Bounce Back and Reclaim the TV Entertainment Throne

In this down economy, it seems like everyone needs a laugh – and that’s definitely proving true in the television viewership ratings.

Over the past 10 years, dramas and reality television squeezed comedies out of the rankings, but starting in 2009 things began to change. Comedy shows now hold seven of the top 10 spots in television entertainment (excluding national football). Network executives and media buyers should be taking notice.

Leading the pack are brand-new shows – “New Girl” on Fox, “2 Broke Girls” on CBS. Longer running comedies are also holding their own. CBS’s “Two and a Half Men” experienced a renaissance due to the off air antics of former star Charlie Sheen, who was replaced with Ashton Kutcher in the new season. Viewership has increased by 65 percent with the casting change. Other older comedies like “How I Met Your Mother” and “The Big Bang Theory, both from CBS, are seeing percentage increases as well.

ABC’s “Modern Family,” which won four Emmys last year, has seen a 25 percent improvement during the new fall season. Some analysts point to Modern Family as the reason for the increase in interest in comedies. Although other networks had sitcoms running that were doing quite well, ABC’s critical and commercial success with Modern Family, about a multi-generational blended family, “took the genre to a new level.” It was declared a hit from the pilot episode and gave the creative community a “thumbs up” to pitch and develop comedy shows.

Whether it’s because of boredom from reality programming or the socio-economic realities, one thing is clear – comedy is back!

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USA Network Courts Advertisers, Develops Winning Formula

With more cable stations investing in their own original programming, USA has risen to the top with a proven formula – lighthearted dramas with interesting characters.

Hits like “Burn Notice,” “White Collar” and “Royal Pains” have created a definite niche for the cable giant – which used to air “Murder She Wrote” mysteries and wrestling events.

The popularity of their branding became even more important when Comcast purchased NBC Universal. Financially, the Comcast investors considered USA one NBCU’s biggest financial assets. Now that financial asset is paying off. For the first time, USA is playing a large part in the upfront advertising season. Advertising rates remain low for the amount of viewers that watch USA programming. This creates a good opportunity for advertisers before the rates increase, as they certainly will.

The tagline “Characters Welcome” has set it apart from other cable networks trying to get a toehold in the original programming space. Although USA airs repeats of “NCIS,” “NCIS Los Angeles” and “House,” the formula for original programming has become pretty standard – quirky characters set in sunny locales solving mysteries. The network’s hit show “Burn Notice” was originally set in New Jersey during the initial pitch, but was switched to Miami during development.

Every dreary shot in every original show needs a “fruit bowl” according to the head of original development – whether it is an actual fruit bowl or something colorful and interesting. If USA can avoid becoming too predictable, it can make use of the growing viewership numbers and translate those into advertising dollars this season and into the future.

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Upfront Advertising Costs in High Demand for the Fall

Television advertising spending is expected to increase for the second year in a row, bouncing back from a bleak 2009 ad buying season.

In 2011, the costs of upfront advertising are expected to be higher in response to higher demand. Upfront advertising is purchased before the fall television season begins.

However, one of the biggest factors in ad spend and ad availability is still up in the air: The National Football League may cancel several of the games planned for Fall 2011 – and NFL games are frequently among the best times to advertise and fetch the highest ad spend dollars. In addition, media investors will be paying close attention to earnings reported by media companies like Viacom, Discovery Communications, CBS, Comcast and Time Warner, which will be released over the course of the next few months.

This year’s projected ad spend is part of a two year trend. After a difficult year in 2009, earnings for the top four media companies were up 15% to $7.37 billion in 2010. Cable networks saw a 19% increase in the same period of time with earnings coming in at $8 billion. The higher the earnings for television companies, the more likely marketers will spend their future advertising dollars there.

Despite competition from online marketing, television has reigned supreme among ad-supported media. Publicis Groupe SA’s ZenithOptimedia predicts that television ad spending will grow by 5% during this year, compared to an overall growth of 2.5% for overall U.S. advertising spending.

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Pepsi Co Launches First Pepsi Ad Campaign in Three Years

After sinking to #3 behind Coke and Diet Coke, Pepsi’s flagship product is finally going to be fighting back with fresh advertising.

The new ad campaigns, which will launch  this summer, are the most visible sign that Pepsi is going to throw weight into its flagship brand. Advertising spend for regularly Pepsi and Diet Pepsi combined totaled $153.3 million during 2010, compared to $252.6 million for Coca-Cola’s top two soda brands. Advertising dollars that would normally be spent on Pepsi products were shuffled into supporting healthier fare.

Since CEO Indra Nooyi took over five years ago, the marketing and advertising teams have turned its attention to juice, oatmeal, Gatorade and other “good for you” choices. In addition, PepsiCo made major investments requiring majority share in a few of their key “good for you” manufacturers. Although the sales figures for these products have doubled projected revenue through the year 2020, it’s been at the expense of the soda product. This left media buyers and industry insiders doubtful about Nooyi’s ability to support the biggest brand.

All that is about to change with Pepsi’s new ad campaign “Summer Time is Pepsi Time.” PepsiCo reports that it will spend about 30% more this year on TV advertising. In addition to new commercials and ad campaigns, Pepsi will sponsor Simon Cowell’s new show “X Factor” with a $60 million deal starting in the fall. With the changes in advertising direction and money dedicated to the flagship brand, bottlers, media buyers and others that rely on Pepsi products are looking forward to a brighter future.

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Shoppers, Retailers Enjoy Technology Enabled Checkout

A new form of technology is taking the concept of self-checkout one step further. The system, called Scan It, allows shoppers to scan items with a smartphone-like device and keep a running total of their purchases while they are making their way through the aisles. It is currently being used in Stop & Shop and Giant Supermarkets in the Northeast United States.

The system is popular with shoppers because it saves time and can help them save money. Scan It automatically creates coupons for some items based on purchases. For example, scanning a coffee canister can produce a coupon for creamer. Coupons are printed about 12 times per shopping trip. Customers can bag the items as they are shopping as well. At the end of the shopping trip, participants can scan their ATM or credit cards right through the system and walk out – never having to wait in line.

While the system is definitely convenient for shoppers, it’s also helpful for stores as well. Not only does it reduce one of the main complaints of shopping – waiting in line – but also participant stores are finding that shoppers are buying more. Shoppers are spending an average of 10% more using the Scan It system.

Grocery stores aren’t the only stores testing out point of purchase technology. Nordstrom stores are using mobile devices to assist salespeople search through inventory and complete purchases all from the sales floor. This lets customers find exactly what they need and purchase it without visiting a register. Home Depot is testing a similar program.

If Scan It and the other retail mobile devices prove to be popular, we may see the end of traditional checkout stands as we know them.

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Online Video Might Pose Problems for Providers in Year to Come

It’s no secret that people are using the Internet more than ever these days, but it’s the type of data that they’re transferring that has Internet service providers (ISPs) and networking companies worried.

By 2014, Cisco Systems estimates that Internet traffic will reach 64 exabytes a month, which is over 12 times more traffic than in 2006. The reason for the increase in traffic? Online video.

With providers offering consumers the ability to watch their favorite movies, television shows and video clips online, the strains on the network are growing. In addition, the costs related to  providing video over broadband are growing increasingly less attractive for providers. There are no meters to measure bandwidth usage for consumers, which means that there’s a “revenue per bit” problem for Internet service providers. The person who logs in to check their email once per week pays the same rate as the person who streams 30 gigabyte movies on a consistent basis, even though the latter is using far more bandwidth.

By 2014, the total investment needed to upgrade and stay competitive may be more than many ISPs can handle. Ultimately, there needs to be a change to the basic business model of ISPs – which may mean higher costs for consumers.

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Do Networks Need An Alternative Universe Like Basic Cable Channels?

Basic cable channels have much more to offer the average media buyer today than in the past.

The major cable networks are trying to expand their horizons and offer their targeted viewer series that the broadcast networks would not touch. This has given an edge to the cable networks that major networks are trying to bridge.

While broadcast networks depend on antiquated sweeps and a few months out of the year to tell them which television shows to keep on the air or cancel, cable channels have much more freedom as far as what they can show their viewing audience. For example, shows like Drop Dead Diva on Lifetime have found a devoted audience and make a profit for the channel. Along with shows like It’s Always Sunny in Philadelphia, Sons of Anarchy and Army Wives, the landscape of cable – and television in general – has changed.

So can basic cable channels teach the broadcasting giants some things? It is quite possible. The average cable television series is produced for $2.5 million as opposed to $4 million which is what most of the mainstream series on the broadcast networks costs to produce per season. This allows cable to create top quality shows while keeping costs low and still remains appealing to the drtv media buyers.

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Facebook and Money

Facebook is seeing unprecedented growth in a sector that many didn’t see – its games sector. Companies like Zynga are making millions creating Facebook-exclusive games such as Farmville and Mafia Wars.

These cloud-based games have created a steady consumer base for the popular social networking empire. The major reason for this sudden rush in popularity is the hype surrounding Facebook and the ease of buying things using the approved Credits.

The Credits system was created to allow Facebook users to have a common virtual currency that can be used in a variety of ways. Facebook users can buy virtual currency (Credits) and use them to buy upgrades for games and virtual gifts to send to friends. Analysts foresee a larger future for Credits.

Some experts even speculate if the social network pioneer could overtake PayPal as the premier international virtual currency exchange. This would position Facebook to eclipse Google as the one-stop destination on the web. People are able to log in to many websites using their Facebook accounts; many of these are commerce sites.

Credits could be used anywhere that allowed Facebook user profiles access. The versatility of Facebook allowing users to shop while updating their profiles is enticing. Facebook downplays any prospective plans surrounding any future involvement with Credits.

A spokesperson commented that Facebook is expected to be working with the Credits system extensively in the coming months. The prospect of Facebook shaping the way people spend money is not as far-fetched as it sounds.

Just a few short years ago, many people had MySpace accounts, while only a few eggheads had Facebook profile. Now things are quite different. Facebook stayed viable by listening to the market and adapting. Using Credits to personalize user experiences online is just one more innovation that will change the virtual world.

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Sites in Like, Not Love, With Facebook Link

The relatively new “Like” button from Facebook, allowing website owners to add a simple social networking button to their site so that visitors can share it on Facebook, has gained popularity amongst many websites.

Sites ranging from news outlets to e-commerce spaces are sporting the new Like button, but some are questioning who benefits more from it: them or Facebook.

The benefits should be obvious, as the button allows users to share their “likes” (i.e. a specific website, page, or product) with their Facebook friends. The average person clicking a Like button has 140 friends, all of which are potential customers who may be interested. This word-of-mouth can be powerful, but the data the website owner gets can be murky.

Facebook shares simple, aggregate data with demographics and similar, but not specific data about individual users on even the most active of users. Although this data is freely available to other Facebook users, it is not available to websites outside of Facebook. This is due to obvious privacy concerns, but some website owners are wondering whether the data Facebook gains from the Like button is more valuable than what they’re getting from having it on their sites.

Other sites, however, find the Facebook interaction extremely useful and profitable. One popular celebrity news outlet says that Facebook users who visit the site are more likely to spend two to three times the amount of time on the website as are “surfers” who come in from search engines and other sources. The longer a user stays on the site, the more valuable its ad revenues become.

Shopping sites are also gaining revenue from using the Like button. Some see as much as a 50% leap in sales coming from Facebook after adding the button.

Those who have a problem with Facebook’s unwillingness to share data are those whose primary income is from advertising. Without the data, they can’t get top dollar from their advertisers because they can’t produce the metrics those top buyers want to see in order to invest.

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Social Media Draws A Crowd

Advertising dollars are increasingly flowing into social media campaigns with Facebook, Twitter and similar sites getting more and more attention from Madison Avenue.

Companies new and old, from startups to long-established public relations firms, are vying for dominance in this new marketing arena.

Many large names, such as Interpublic Group of Cos., Publicis Groupe, Meredith and others are getting into the game. Interpublic has a new practice called Rally which began last month to focus on online marketing campaigns. Publicis will enter the space this year and Meredith Corp. has New Media Strategies handling the online campaign for Chrysler.

The number of big names in social media marketing – which even a year ago was still a buzz term in tech offices, mostly ignored by media giants – has grown to become an estimated $2.5 billion market this year. Up to now, most of those involved in the genre were either startups with little name recognition or were hands-on, internal affairs by the advertisers themselves.

PepsiCo is one of those hands-on advertisers, with its Gatorade brand buildings its own Mission Control Center for monitoring social media efforts for the sports drink.

Other big names in the goods and services fields are looking to make partnerships with established experts in media marketing. Kraft signed on 360i, a Japanese digital advertising agency, to handle its social media monitoring and development. Kraft is entering the social arena with brands such as Oreo and Jell-O.

Microsoft, meanwhile, is looking for a social media handler to pool all of its disparate efforts for Xbox advertising together, through their asset management firm State Street.

The ubiquitous proliferation of the social media expert is something of a liability to the industry, though many big companies are looking to smaller firms with more specialized expertise. Dominos hired New Media Strategies, a word-of-mouth marketing firm. Dominos says it specifically chose NMS because of its focused expertise, whereas many larger marketing firms are including social media as a “side note.”

The space is growing fast and as larger names enter the field, many of the smaller experts will be absorbed or displaced. Others will find a niche they can hold and exploit. Most in the industry agree that the next couple of years will see a lot of consolidation and shakeup in the field.

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